The California Public Employees' Retirement System, the largest public pension fund in the U.S., rode a surge in its real estate portfolio to return 12.3% in the fiscal year ended June 30. The fund's 38.4% return on office, retail, apartment and industrial real-estate investments, and its 36.5% return on California housing, land and urban real estate nearly doubled the performance of CalPERS' real-estate benchmark, which returned 20.2%.
Among other alternative investments, CalPERS' venture capital and private equity portfolio rose 19.2%, edging its benchmark, which was up 18.6%. The fund's hedge fund portfolio also rose by double digits, up 11.2%. While the 12.3% return was well ahead of CalPERS' 8% target return, it lagged the Russell 2000 Index, which rose 12.6% during the period.